Amortizing Goodwill Barley Brewery purchased the assets of Fox Grain Company for $950,000. Just prior to the purchase, Fox used its available cash to pay off all its liabilities. The book value of Fox’s assets at the date of purchase by Barley was $600,000 and their estimated fair value was $750,000.

a. What amount will be reported by Barley Brewing as goodwill immediately following the purchase?

b. If the goodwill is expected to be amortized on a straightline basis over 10 years, what impact will the amortization of the goodwill have on the reported net income of Barley Brewery in the second year of ownership?